In what is likely to be his last FIA Expo address as chairman of the CFTC, Dr. Heath Tarbert spoke for about half an hour on Tuesday morning at this year’s conference which, of course, is being Zoomed around the world. Tarbert, never straying far from his own role at the commission, presented a thirty-minute campaign speech.
A perusal of the CFTC’s website mirrors Tarbert’s remarks: x number of public meetings (more than the total in the whole previous seven years!), first ever public meeting with the SEC, bigger fines than ever, better enforcement than ever. Plus, as the chairman noted, he was the first official to declare publicly the opinion that Ether (Ethereum’s coin) is a commodity, which ErisX later leveraged into a futures product.
Let’s stop there for a moment. Why is Ether a commodity? What is the basis for Tarbert’s decision? Is there guidance available from the CFTC? Ether, the second biggest digital asset, was such a big deal that the CFTC issued a public “request for information” asking numerous detailed questions. A number of individuals, associations and companies answered these questions not long before Tarbert was named chairman. Tuesday’s remarks afforded the chairman a great opportunity to speak about how the determination that Ether is a commodity was made, how the public comments contributed to the commission’s understanding, and what, if any, implications the CFTC believes the determination has for the digital assets and derivatives industries.
The chairman’s discussion of enforcement successes also lacked context on Tuesday morning. On other occasions we have learned that the CFTC’s upgraded technology and data research capabilities have contributed meaningfully to the commission’s enforcement, and Tarbert could have told the FIA audience how that all comes about. For example, what aspects of the JPMorgan spoofing settlement, which led to more than $900 million in penalties on the bank, derived from these new data capabilities?
Tarbert missed an excellent opportunity to address industry professionals with information that goes deeper than the commission’s press releases. Maybe the next chairman will trust FIA participants with more analysis and information.